Outside AI, the market isn’t looking that hot

The “everything store” might have secured its biggest customer yet.

On Monday, Amazon announced that it had signed a $38 billion deal with OpenAI, offering the ChatGPT maker access to Amazon Web Services’ infrastructure.

On the one hand, the move isn’t too surprising — a continuation of OpenAI’s spending spree as it looks to secure resources to run its power-hungry artificial intelligence models.

On the other, OpenAI’s turn to Amazon shows that the firm is diversifying from its reliance on Microsoft, which had been its exclusive cloud services provider until this year. That could suggest OpenAI is getting ready for an initial public offering as it looks to signal “both independence and operational maturity,” as CNBC’s MacKenzie Sigalos writes.

Amazon shares surged on the news to close at a record high. Nvidia also had a positive day after Microsoft announced it was granted a license by the U.S. government to export the AI darling’s chips to the United Arab Emirates.

While Big Tech is attracting investor interest, the rest of the market has been rather lackluster.

Even as the S&P 500 and Nasdaq Composite rose on the back of the tech behemoths, more than 300 stocks in the broad-based index ended the day lower — a warning sign that only a narrow segment of the market is faring well.

Palantir’s third-quarter results beat estimates. The company foresees revenue of around $1.33 billion for the current quarter, outstripping the $1.19 billion expected by analysts, according to LSEG. Shares, however, fell 4.3% in extended trading on Monday evening stateside.

OpenAI signs a $38 billion deal with Amazon. Under the agreement, OpenAI will immediately begin running artificial intelligence processes on Amazon Web Services, harnessing Nvidia’s AI chips. Amazon shares popped 4% and closed at a record.

Microsoft gets approval to ship Nvidia chips to UAE. The U.S. Commerce Department license, granted in September, allows Microsoft to ship 60,400 additional A100 chips, involving Nvidia’s advanced GB300 graphics processing units. Shares of Nvidia rose 2.2%.

U.S. markets mostly rise. On Monday stateside, the S&P 500 and Nasdaq Composite advanced, boosted by tech shares. The pan-European Stoxx 600 ended flat. Auto stocks including Renault and Volkswagen rose.

[PRO] Growing risks to global equities. European stock markets hit highs last week. But there are several factors that might derail this upward trajectory, analysts say.